A look at the pros and cons of both wallets to help you make the right decision.
In cryptocurrency trading, you can choose to use a “hosted” wallet—by way of allowing the crypto exchange to hold and manage your crypto—or you can download a self-custodial wallet, of which you take full ownership. Given the growing number of such crypto wallets offering varying features, it can be challenging to decide which is the most ideal for you.
Here, we compare Coinbase and MetaMask, two of the most popular wallets on the market, to help you decide which to go for.
Founded in 2016 as a browser extension, MetaMask is one of the oldest and most popular Ethereum wallets. It allows you to hold and trade Ether and other ERC-20 tokens directly on your browser. Initially only accessible via your browser, the decentralized application (dApp) is now available on your mobile, too. This enables you to swap tokens on the app without going on to decentralized exchanges (DEX).
MetaMask is an open-source wallet, meaning that the code is available for anyone to audit and review. Thanks to that, the platform’s community can fix glitches, in case they spot any. Though it is primarily a hot wallet (relying on your software, i.e. the internet), it is also compatible with hardware wallets, or cold wallets, like a USB.
Being a hot wallet, MetaMask can be susceptible to attacks because software applications are easier to hack. Moreover, if you use the browser extension, odds are that your browser will save your password, which can make you even more vulnerable to crypto scams.
Founded in 2018, the Coinbase wallet is an extension of the well-known crypto exchange Coinbase. The Coinbase wallet allows you to store and use Bitcoin, Ethereum, Litecoin and Bitcoin Cash, among other crypto assets. You can also use it to buy goods and services with those tokens. At the outset, do note that Coinbase offers two wallets: a hosted one on their crypto exchange and an official Coinbase wallet.
When you choose to trade on the Coinbase exchange, the platform creates a “hosted” wallet for you, which is to say that they store your crypto and have access to your information. This makes it very user-friendly because you don’t have to worry about safeguarding your tokens. While it is the safer option, it is not the most lucrative, as users cannot access many crypto features if their wallet is hosted by the platform.
The Coinbase wallet, on the other hand, is a self-custodial one, like MetaMask. You have complete control over your crypto earnings. Another similarity is that Coinbase wallet is also a hot wallet, meaning that it relies on software applications and thus is possible to be hacked.
However, Coinbase wallet is closed-source, meaning that if the community has any complaints, they can’t modify the code. They have to contact customer service instead, which can be a hassle.
Summarizing the differences
For one, while MetaMask is open-source, the Coinbase wallet is not. Being open-source can be advantageous, as it would make MetaMask more transparent and community-driven. That said, it also creates the possibility of people messing with the code.
In addition to that, while the Coinbase wallet lets you trade in Bitcoin, Litecoin, Dogecoin and more, MetaMask limits users to tokens on the Ethereum blockchain only.
In the end, the wallet you pick must reflect your needs. For instance, if you just want to access dApps on the Ethereum blockchain or want to store your tokens in a cold wallet, opt for the MetaMask wallet. On the other hand, if you want to trade a diverse range of cryptocurrencies, go for Coinbase.
Besides these wallets, you can also choose from many other crypto wallets that might suit your needs better. Engage in comprehensive research and pick a wallet that enhances your overall crypto trading experience.
Header Image by Flickr